Canadian Investment Review

Why Luck Matters More Than Skill

Written by Caroline Cakebread on Monday, October 31st, 2011 at 2:05 pm

statmanAre you feeling lucky? Then you might be a better investor than you think according to Meir Statman,¬†a professor at Santa Clara University and author of “What Investors Really Want: Know What Drives Investor Behavior and Make Smarter Financial Decisions.” A CIR ¬†advisory board member sent a link to this video this morning — it’s Statman talking to Bloomberg TV about why luck plays more of a role in investing success than skill. As it turns out, investors ought to take some lessons from gamblers who actually understand the concept of luck and how to arrange the odds in their favour. In an investment portfolio, this translates into diversification. Click on the image to watch the interview.

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